What the Proposed New Overtime Rules Mean to You

Overtime Requirements Now

Currently, overtime rules do not apply to employees making $455 per week, those with duties including supervision of other employees, independent decision making, and significant input regarding company decisions such as hiring and firing.

Although some salaried employees are eligible for overtime (those who don’t meet the above requirements), most overtime eligible employees are hourly workers. The Fair Labor Standards Act (FLSA), passed in 1938, set standards that any hours worked over 40 in a work week must be paid at the overtime rate of 1.5 times the employee’s regular rate.

Certain states (California, for example), have additional overtime rules based on hours worked per day and how many consecutive days an employee works.

Proposed Changes in Overtime Rules

The Department of Labor (DOL) recently proposed new overtime rules that would more than double the salary threshold determining overtime eligibility for workers. The proposed overtime threshold will be raised to $50,440 annually, regardless of an employee’s duties.

How Do the Proposed New Overtime Rules Affect You?

If you now have employees who are exempt from overtime but will meet the new overtime threshold, you will be required to reclassify them as non-exempt, even if their responsibilities previously qualified them as exempt.

And pay them accordingly.

Other Things

You will have to enforce more tracking of hours worked

Be sure to remind employees not to check company emails or voicemail after working hours, since those tasks would be considered time worked and count toward their total weekly hours

Managers will need to be aware of which employees are approaching the magic number of 40 hours in a work week in order to control costs more effectively

You may even consider updating your company’s time clock system, perhaps moving to fingerprint scanners so employees can’t clock in and out for each other